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the language of
the underlying
contract must be
specific in
authorizing
collection fees that
are in addition to
the actual cost
incurred by the
debt collector.

Courts have also reviewed issues related
to adding interest to purchased debts.

Overall, the issue of adding fees is
quite complex. Collectors should
carefully review applicable state and
federal laws before considering adding
collection fees to consumers’ debts.

To learn more, ACA International
members can check out ACA
SearchPoint document #8000, Adding
Fees to Debts, which aims to simplify
the task by compiling information on

Determining whether or not collectors may add fees, interest or other charges to a
consumer’s debt can be a daunting task.

Generally, under the Fair Debt
Collection Practices Act, the addition of
any interest, fees, collection costs or
other expenses incidental to the original
debt is permitted only when the amount
is expressly authorized by the
agreement creating the debt or
permitted by law. Any additional fees
may not be unconscionable, and
collection costs should bear a
relationship to the actual costs of
collection.

Prior to attempting to collect any
additional fees from a consumer, debt
collectors must carefully review not
only the underlying contract creating
the debt, but also whether the amount
is permitted by law as well. State laws
vary regarding the permissibility of
adding fees and other charges to debts,
and some states are completely silent on
the issue.

As the permissibility of adding fees
depends on state law, it’s important to
research the laws of the state you are
collecting in. States that do have laws
about fees have their own specific rules.
For example, in Arkansas, collection
agencies can’t charge fees in excess of
50 percent of the total amount actually
collected on the account.

Courts have also weighed in on the
issue of adding fees. One court, for
instance, found it was improper for a
collection agency to attempt to collect a
33 percent collection fee as well as
interest on a student loan, as the
additional charges were not expressly
authorized by the agreement of the
parties and were expressly forbidden by
state law.

Other courts have concluded that

Adding Fees to Debts

Can collection agencies add fees, interest and other charges to a consumer’s debt?

Recently Updated Documents

To read all the ACA SearchPoint compliance documents, visit acainternational.org/searchpoint.

Verification of a Debt: State Specific
Requirements, #1127, Updated 5/5/15

adding fees in one document. cm

ACA SearchPoint is filled with
documents that put important
compliance information related to the
FDCPA, FCRA, TCPA, state laws and
many other topics at your fingertips. To
access ACA SearchPoint, visit
acainternational.org/searchpoint.